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<br />8. The Signatories acknowledge that they have reached a separate agreement concerning <br />outstanding issues related to franchises. By its terms, that separate agreement becomes effective <br />only upon this Agreement's becoming effective pursuant to the terms of paragraphs 4 and 19. <br /> <br />9. Electric Delivery agrees to negotiate with Cities, and Cities agree to approve, a tariff that <br />permits Cities to request undergrounding of new or existing distribution facilities. The tariff <br />shall ensure full cost recovery by Electric Delivery through a surcharge in the requesting city in <br />the event that no third party is required by Electric Delivery's tariff, or applicable city ordinance, <br />to pay for undergrounding costs. That tariff will also allow Cities to request undergrounding of <br />transmission lines to the extent Electric Delivery determines that (a) such undergrounding is <br />feasible, (b) such undergrounding is consistent with the PUC's Substantive Rules and ERCOT's <br />requirements, and (c) Electric Delivery can recover the costs of such undergrounding through a <br />surcharge in the requesting city. Electric Delivery will not be obligated to file the tariff for city <br />approval until after the expiration of the ~rice to Beat or the modification of the Price to Beat in <br />a manner that allows pass through of tariff charges to the ultimate consumer. <br /> <br />10. Electric Delivery agrees to provide quarterly updates to representatives designated by <br />Cities and their consultants concerning Electric Delivery's capital expenditure projects and <br />affiliate transactions, the creation and regulatory treatment of a Pension and Health Benefits <br />Reserve for Electric Delivery, possible workable parameters for performance based rates for <br />Electric Delivery, and other topics as agreed upon by the Signatories. Electric Delivery will <br />work with Cities to provide information requested by Cities concerning those topics. <br /> <br />11. Electric Delivery shall pay up to $10,000 per month in regulatory expenses directly to <br />Cities' consultants, after receipt of appropriate documentation and invoices, provided said <br />expenses may be deferred for recovery. Cities agree to support recovery of such costs in Electric <br />Delivery's next rate case. Should recovery be denied by the PUC, then the payments will <br />immediately cease. <br /> <br />12. Electric Delivery shall pay up to $40,000 per month through December 2009 to, <br />reimburse Cities for their involvement before ERCOT and the PUC concerning market design <br />issues, after receipt of appropriate documentation and invoices. <br /> <br />13. Electric Delivery agrees to reimburse Cities for the expenses incurred related to the <br />negotiation of this Agreement in an amount not ,to exceed $25,000 after receipt of appropriate <br />documentation and invoices, and Cities agree that those costs can be deferred for recovery in its <br />next rate case and agree to support deferral and recovery in that case. Notwithstanding <br />paragraph 14, any rights Cities may have under PURA, and any provisions in existing applicable <br />franchise agreements to the contrary, Electric Delivery agrees to reimburse Cities for reasonable <br />and necessary expenses incurred in Electric Delivery's next system-wide rate case in an amountynot to exceed $2,000,000. The rate case expense reimbursements will be made monthly, <br />beginning with the first month after the consultants are hired. Cities further agree not to contest <br />the recovery of Cities' rate case expenses and Electric Delivery's reasonable and necessary rate <br />case expenses in Electric Delivery's next system-wide rate case. <br /> <br />3 <br />